Is The BISD Health Plan Saving Money? Or Spending Less?

January 28, 2011 11:40 PM

The Brownsville Independent School District’s self-funded employee health plan cost the district less during 2009-2010 than it did during each of the previous two school years, BISD’s school board insurance committee learned Friday.

A summary provided to committee members by administration showed that net costs for the plan in 2009-2010 totaled $37.05 million compared to $43.45 million in 2008-2009 and $37.67 million in 2007-2008.

Per-employee, per-year costs also went down. In 2009-2010 the PEPY figure was $4,893 compared to $5,817 in 2008-2009 and $5,141 in 2007-2008. 

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“That is almost unheard of in the healthcare industry,” Eric Wright of Mutual Assurance Administrators Inc. said after the meeting. Wright was at the meeting to present information and answer questions about the first quarter of MAA’s second plan year, which started Oct. 1, 2010.

MAA took over as third-party administrator for BISD’s health plan in October 2009. The previous TPA was HealthSmart Benefit Solutions Inc., which administered the plan the previous two years. Before that the TPA was Mutual of Omaha.

In self-funded health plans, the TPA administers the plan on the employer’s behalf, providing a network of medical providers, claims management and other services.

BISD is in the process of suing HealthSmart for $14.5 million in allegedly higher medical claims and improper charges during the two years HealthSmart administered the plan. The lawsuit, filed in August, was the result of an independent audit.

On Friday, Wright told insurance committee members that between Oct. 1 and Dec. 31, 2010, 91 percent of all plan expenses went directly to the benefit of BISD employees and their dependents.

In an executive summary provided to the committee, MAA said the plan had a per-employee, per-month cost of $448.53, which calculates to $5,382 per employee per year. The report said Mercer’s National Study of Employers for 2010 showed a national average PEPY cost of $9,562, meaning BISD’s costs so far in 2010-2011 are 56 percent of the national average.

The calculations exclude the cost of biometric screenings for BISD employees, which are part of MAA’s wellness and disease management efforts.

Kathy Corder, the chief marketing officer for Personalized Prevention, MAA’s wellness and disease management provider, said the biometric screenings are showing encouraging results.

The screenings, which are conducted where people work, are free to employees. Laboratory work is paid for by the plan. Corder said there were 4,988 such screenings in spring 2010 and 4,896 in fall 2010.

Of those, 713 screening participants were referred to care management, Corder said, and 70 were found to be diabetics whose blood sugar was out of control. Those 70 are now controlling their diabetes, resulting in savings of as much as $2 million over the life of the employee.

Editor’s Note: “How do we know we are doing much better this year than last year?” asked Don Pedro. “What was this year is last year plus or minus this year’s change,” replied the expert. “If change is the only constant why do we need to measure it? You dont know if something is better if you didnt know how to measure what it was before” countered Don Pedro. And out he went.

(Don Pedro is a well known local sage in Brownsville, Texas whose advice has guided several generations of loyal readers of the Brownsville Herald).

           If the BISD pepy (per employee per year) health care costs is $4,893, how does that compare to other local Valley school districts such as Rio Hondo, La Feria, San Benito, Mercedes, Weslaco, McAllen, PSJA, Sharyland, Point Isabel, Los Fresnos, and La Joya Isd?  Some of these districts have Blue Cross, others have HealthSmart and Texas True Choice.  A comparative analysis would be interesting.